"At the bottom of the world financial crisis is international monetary disorder. Ever since the post-World War II Bretton Woods system -- anchored by a gold-convertible dollar -- ended in August 1971, the cause of free trade has been compromised by sovereign monetary-policy indulgence."

Wow, people. Where to begin to parse this mess? Sentence #1 is completely false. At the bottom of the world financial crisis is a housing bubble and inadequate allowance for risk. Sentence #2 is misleading at best. Trade has exploded since 1971. Of course she could be arguing that it would have grown even faster, but that case is not being made. Further, internal politics in poor countries and rich country lobbies have compromised "the cause of free trade" by several orders of magnitude more than have any monetary shenanigans.

People, the Bretton Woods system never really worked. In the late 40s and early 50s there were massive devaluations undertaken without IMF permission. Throughout the 50s the US allowed Europe to discriminate against US goods. Full currency convertibility for trade didn't occur until the mid 60s, so the system as designed really started then, lasted well less than a decade, and was pretty much perpetually in crisis.

A world wide system of fixed exchange rates just won't work in a world of free capital flows, unless domestic government forsake all internal considerations and dedicate their monetary policies 100% to the peg. We have seen that no modern societies, whether democratic or autocratic are will to do this.

So Judy, repeat after me: (1) floating exchange rates have almost nothing to do with the current financial crisis. (2) The Bretton Woods system never worked as designed for any reasonable period of time. (3) Advocating a return to a pseudo gold standard is equivalent to howling at the moon given the political realities of our modern world.

People, a great book on all this stuff is Barry Eichengreen's "Globalizing Capital". Easily readable by non-economists and incredible informative and well written.

LINCOLN, Neb. – The mother was running out of more than patience when she abandoned her 18-year-old daughter at a hospital over the weekend under Nebraska's safe-haven law. She was also running out of time: She knew that state lawmakers would soon meet in a special session to amend the ill-fated law so that it would apply to newborns only.

"Where am I going to get help if they change the law?" said the mother...

To the state's surprise and embarrassment, more than half of the 31 children legally abandoned under the safe-haven law since it took effect in mid-July have been teenagers.

But state officials may have inadvertently made things worse with their hesitant response to the problem: The number of drop-offs has almost tripled to about three a week since Gov. Dave Heineman announced on Oct. 29 that lawmakers would rewrite the law.

With legislators set to convene on Friday, weary parents like the Lincoln mother have been racing to drop off their children while they still can.

On Thursday, authorities searched for two teens — a boy and girl, ages 14 and 17 — who fled an Omaha hospital as their mother tried to abandon them. The mother was trying to take them from the car to the emergency room when they took off.

Mike D'Antoni, that is. People the Knicks are a living, breathing real NBA team. They are 5-3 ("if the playoffs started tomorrow" lol) compared to last years 2-6 and they are fun to watch. They play hard. Quite a change from last year (see this or this)

Amazingly a lot of it has to do with how D'Antoni handled Stephon Marbury; in contrast to Zeke's enabling, Mike buried Steph alive, and the team responded.

Yesterday D'Antoni activated an injured sumo wrestler instead of Starbury. Steph's response? He speculated that if the Knicks would cut him, he'd love to play for the San Antonio Spurs! LOL. Good luck with that one Stephon. If anyone would treat him harsher than Mikey D, it'd have to be Coach Pop wouldn't it?

People I write in praise of the two piece combo (no not the one from KFC). Two of my very favorite new groups are duos; No Age and F***k Buttons and appreciating them made me reflect on other great duos.

I really like the Black Keys and the White Stripes for midwestern whiteboy blues, and going back just a bit further in time Quasi and the Spinanes are big two piece favorites as well.

So if you are a guitarist or keyboardist and are thinking about starting a band, just get ye a drummer and you're good to go!

Over at MR, Tyler writes an ode to the superstar. He argues that team players do less to "benefit society" than does the selfish superstar.

I largely agree, except that Tyler appears to believe that being a selfish superstar or a team player is a matter of choice, and that winning does not help raise the fame of a superstar.

I think both these beliefs are false.

Winning adds to the luster and fame of stars. how often do we hear that a superstar doesn't "have a ring" or that one has more rings than the other.

Superstars are not team players no matter what team they are on (nor should they be for the reasons Tyler gives).

The team players are marginal talents who can earn a good paycheck and some amount of "inside baseball" fame by doing what is needed for overall success. Shane Battier, call your office.

Ironically, too many superstars can be counterproductive to team performance.

Looking at the NBA, it seems that in the long run, one per team is about the max. Shaq and Kobe couldn't stay together. Pippen was nowhere near a superstar. In Boston's big 3, Ray Allen is a one dimensional player and very far from a superstar.

The closest thing to a counter example of my general point is Kevin Garnett; a superstar who really seems unselfish. Note that Starbury couldn't accept being on Garnett's team. From the past, maybe Magic would qualify.

So winning is part of the superstar's fame building and winning requires team players who help on defense while the superstar rests, set picks for the superstar, pass instead of shoot, and rebound.

Any team player would rather be a superstar but they don't have the skilz.

The worst situation is when a player whose skill set says team player tries to take it upon himself to be the superstar (phone call for Ricky Davis).

Tuesday, November 11, 2008

"For eight years, the sign next to the cash register at Ben’s Chili Bowl has let patrons know that only one customer was allowed to eat for free, and that was Bill Cosby. As of last week, that is no longer so. After the presidential election, management added another asterisk to the white paper sign near the cashier, listing others with free-eats rights at Ben’s: the Obama family — President-elect Barack Obama, his wife, Michelle, and their daughters, Malia and Sasha."

Recently Obama's transition chief pronounced him ready to "take power and rule". Now, in an article about the Obamas and the Clintons, we are treated to the following:

"It’s the latest phase in the ruling-class soap opera that is the Obama-Clinton alliance, where the two first families negotiate new personal relationships as Hillary Clinton wrestles with her own ambivalence about Michelle Obama’s husband, a man she once ridiculed as too callow to govern, and then worked tirelessly to elect."

My old friend George Selgin goes after Alan Greenspan and also makes sense about how to judge the stance of monetary policy:

"one cannot accurately gauge the easiness of monetary policy by looking at money-stock measures alone. Instead, one must look at measures that indicate the relationship between the stock of money on one hand and the real demand for it or, if one prefers, its velocity. What matters isn't how rapidly the money stock grows, regardless of how one chooses to measure it, but whether its grows faster than the public's demand for real (that is, price-level-adjusted) money holdings. Even a low, a zero, or a negative absolute growth rate for some money-stock measure can prove excessive if demand for the monetary assets in question is declining. Regarded in light of this consideration, Greenspan's monetary policy was in fact "easy," as I will endeavor to show."

"US President-elect Barack Obama intends to push a comprehensive programme of social and economic reform beyond an immediate emergency stimulus package, Rahm Emanuel, the next White House chief of staff, indicated on Sunday."

"Mr Emanuel brushed aside concerns that an Obama administration would risk taking on too much when it takes office in January. He said Mr Obama saw the financial meltdown as an historic opportunity to deliver the large-scale investments that Democrats had promised for years."

"Tackling the meltdown would not entail delays in plans for far-reaching energy, healthcare and education reforms when all three were also in crisis, he said. “These are crises you can no longer afford to postpone [addressing].”

"Mr Emanuel, Mr Obama’s first appointment after his emphatic victory over John McCain last week, added that Mr Obama would push hard during the 11-week transition before he is inaugurated for early assistance to the collapsing US car industry, which he described as “an essential part of our economy”."

"Sunday’s comments also reinforce the impression that Mr Obama’s transition economic advisory board – which includes leading lights of the Clinton era, such as Lawrence Summers and Robert Rubin – is tilting heavily towards a “big bang” approach that would combine a short-term stimulus with large public investments to raise the longer-term US growth rate."

"In a radio address to the nation on Saturday, Mr Obama emphasised the urgency both of passing a fiscal stimulus package, which could include a middle-class tax cut, and of moving swiftly ahead on long-term public investments."

“We can’t afford to wait on moving forward on the key priorities that I identified during the campaign, including clean energy, healthcare, education and tax relief for middle-class families,” said Mr Obama. “We also need a rescue plan for the middle class that invests in immediate efforts to create jobs and provides relief to families watching their paychecks shrink and their life savings disappear.”"

Man oh man oh man oh man. Again with the canard that the big 3 automakers are "an essential part of our economy" along with the view that they will somehow disappear forever absent a few billion from the goodie bag.

And we are also treated to "large public investments to raise the the longer term US growth rates". People, one thing that Robert Solow got right is that investment is NOT the key to long term growth. The key to long term growth is technological progress. Somehow I do not think these public investments will be in the form of R&D grants, or massive increased funding for basic research, or even prizes for specific discoveries or innovations. Absent that, they are not going to raise the nation's long term growth rate.

"We are writing to request that you review the feasibility of invoking the authority Congress provided you under the Emergency Economic Stabilization Act of 2008 (EESA) for the purpose of providing temporary assistance to the automobile industry during the current financial crisis...A healthy automobile manufacturing sector is essential to the restoration of financial market stability, the overall health of our economy, and the livelihood of the automobile sector’s workforce."

"The economic downturn and the crisis in our financial markets further imperiled our domestic automobile industry and its workforce. On Thursday, we separately met with the leaders of the automobile industry, and its top union representative, to discuss the financial challenges confronting the industry and its workforce, and possible actions to address these challenges. We left the meetings convinced that our nation’s automobile industry - the heart of our manufacturing sector - and the jobs of tens of thousands of American workers are at risk. Friday’s news of the automobile industry’s record low sales figures only reaffirm the need for urgent action....."

"Were you to determine that the automobile industry is eligible for assistance under EESA, we would urge you to impose strong conditions on such assistance in order to protect taxpayers and maximize the potential for the industry’s recovery. An automobile industry that is forward-looking and focused on ingenuity, competitiveness, and the creation of green jobs for the future is essential to its long-term viability...."

Oh man oh man oh man. Are autos the "heart of our manufacturing sector?" are the "big" 3 really essential to the "restoration of financial market stability (and) the overall health of our economy"?? Is mandating "green jobs" even one of the top 1000 conditions that should be put on aid to automakers?